Project Planning - Budget Creation

Budgeting and cost control are key components when estimating the costs to any project.  Once the budget has been set and agreed upon, management will have details of actual and forecast costs of the specific project. Budgets identify the planned expenditure of a project, and once the work is under way, the actual and forecast expenditures are regularly monitored.

Assessments

Multiple choice question

Select One correct answer

What is the definition of a project budget?

a) Management is provided with a comprehensive budget, with the understanding of how funds will be used and spent over time for the project and its operations.

b) It is the total amount of approved financial resources allocated for the particular purpose(s) of the project for a particular period.

c) It is a document which constitutes funds that may be needed to implement the project and produce the deliverables.

  • It is the total amount of approved financial resources allocated for the particular purpose(s) of the project for a particular period.

True or False

  • Costs planning and cost estimating are a cardinal aspect of project planning. It involves developing an estimate of the costs of the resources that are required to complete activities. It is important to have efficient cost estimating, as it is vital to both the client and whether the project is to go ahead or not.
  • Costs planning and cost estimating are a non essential aspect to a projects budget. It is not necessary to create a budget.

Discuss project cost estimating.

  • Costs planning and cost estimating are a cardinal aspect of project planning. It involves developing an estimate of the costs of the resources that are required to complete activities. It is important to have efficient cost estimating, as it is vital to both the client and whether the project is to go ahead or not.
  • Define the work required to complete objectives and organise the scope of project management ideologies and procedures.

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Contribute to the estimation and research of cost budget for a project and monitor or control actual cost against budget

Budget Creation

Budget Creation

Definition of a project budget:

It is the total amount of approved financial resources allocated for the particular purpose(s) of the project for a particular period. It is a primary document which constitutes essential funds needed to implement the project and produce the deliverables.

Management is provided with a comprehensive budget, with the understanding of how funds will be used and spent over time for the project and its operations.

Cost budgeting is a tool used to estimate the costs that are crucial for projects, work packages or activities in project management. It includes the estimation of costs, setting a fixed budget, and managing/controlling the actual costs (compared to the estimated ones).

1. Project cost estimating

Costs planning and cost estimating are a cardinal aspect of project planning. It involves developing an estimate of the costs of the resources that are required to complete activities.  It is important to have efficient cost estimating, as it is vital to both the client and whether the project is to go ahead or not.

1.1 Cost estimating

 In cost estimating, an estimator considers the causes of variation of the final estimate for purposes of better managing the project. It entails, the process of forecasting the cost of completing project deliverable.